Cost Inflation Index Table From 1981-82 To 2015-16 For Capital Gains Tax

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Cost Inflation Index Table is very important for the purpose of payment of capital gains tax and is released by the Income Tax Department every year.

Cost Inflation Index Table From 1981-82 To 2015-16 For Capital Gains Tax
The table helps you to calculate capital gains tax on property sold. Let's understand the importance of this table with precise calculation.

Cost Inflation Index Table From 1989 To 2015-16 For Calculation Capital Gains Tax

FINANCIAL YEAR

COST INFLATION INDEX TABLE
2015-161081
2014-151024
2013-14939
2012-13852
2011-12785
2010-2011711
2009-2010632
2008-2009582
2007-2008551
2006-2007519
2005-2006497
2004-2005480
2003-2004463
2002-2003447
2001-2002426
2000-2001406
1999-2000389
1998-1999351
1997-1998331
1996-1997305
1995-1996281
1994-1995259
1993-1994244
1992-1993223
1991-1992199
1990-1991182
1989-1990172
1988-1989161
1987-1988150
1986-1987140
1985-1986133
1984-1985125
1983-1984116
1982-1983109
1981-1982100

A look at the table above and you would realize that inflation has eaten away into the value of money. If you bought a property for Rs 1 lakh in 1982-1983 and sold the same for Rs 25 lakh in 2015-16, why should you pay capital gains tax on the entire profit of Rs 24 lakh, as there has been an inflation.

Hence, the Income Tax Department comes up with a cost inflation index, which helps calculate capital gains with the help of the index and pay tax accordingly.

How to calculate capital gains with cost inflation index?

Let us say that you purchased an apartment for Rs 20 lakhs in financial year 1985-86 and sold the same for Rs 75 lakhs in 2015-16. Then you do not have to pay capital tax on the profit i.e. Rs 75 lakhs-Rs 25 lakhs. But, your capital gains tax would be calculated as follows:

Actual Cost Of Purchase x Cost inflation Index On year of Sale/Cost Inflation Index On Year Of Purchase.

So, capital gains would be Rs 20 lakhs x 1081/133. This would be far higher than the value of sale, so you would not have to pay capital gains.

You need to calculate your tax based on the above formula before paying a tax. In case you do not want to pay the capital gains tax you can invest in another house or in capital gains tax saving bonds. Read more on how to save capital gains tax

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